Happy Trails: Caesars Says Goodbye to Rio; What About WSOP?

Sean Chaffin September 26, 2019 703 Reads
Caesars sell Rio, what about WSOP?

After months of rumors, the news broke on Monday that Caesars has sold the Rio. The home to the World Series of Poker was purchased by “a company controlled by a principal of Imperial Companies” for $516.3 million.

Caesars announced that the series would remain in place at the Rio at least until 2021. The company will continue to operate the property as part of a rental agreement for $45 million a year.

With contracts in place for the next two years, this time also gives Caesars time to determine where the WSOP may move in Nevada. The Rio has hosted the event since it was moved from the Horseshoe in 2005.

So where does that leave the WSOP? What are some options for the annual event that attracts players from around the world? Here are a few scenarios to consider.

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Could the WSOP move from off-Strip to near-Strip convention center?

With the WSOP possibly needing a new home in two years, where could it be headed? Looking at Caesars properties and projects may offer some clues.

One of the first options might be the new Caesars Forum convention center. The $375 million venue is now under construction with plans to open in 2020.

The space would offer an interesting near-Strip location behind the LINQ and Bally’s. When Benny Binion dreamed up the WSOP 50 years ago, he saw it as a way to attract gamblers to the spectacle.

Could the WSOP serve a similar purpose to Caesars’ Strip properties? The Strip might add some added cachet to the event as well.

However, conventions are big business, and big money, in Las Vegas – especially Strip properties. Would the company make enough money to offset lost revenue by devoting two months to poker?

That will be an interesting question to consider – especially with the newness of the venue. Will poker make the cut among big companies looking to host events in the space?

Other poker rooms in Nevada that could be possibilities

Caesars owns several properties along the Strip in Nevada with poker a major player at some of those. Planet Hollywood is a hot spot for the game during the summer with its own lower-tier poker series.

But the property has only 88,000 square feet of meeting and convention space. The Rio has about 160,000. It’s also unknown if the Planet Hollywood space is configured for such an event.

It may be popular for poker each summer, but staging the WSOP at Planet Hollywood might be a challenge. 

Caesars itself seems like a natural choice with 300,000 square feet of convention space. But the same question arises. Could the company afford using such prime convention space for poker?

There are some other options at Caesars’ Strip properties. Here’s a look at the square footage of those casinos with similar sizes as the Rio. Figures are from the official Caesars Entertainment brochure:

  • Bally’s – 175,000
  • Caesars – 300,000
  • Flamingo – 73,000
  • Paris – 140,000

It might also be important to note that the WSOP continues to grow each year. That includes more and bigger events with a seemingly unstoppable increasing number players. A new home would have to be able to accommodate that growth.

Could the WSOP stay put at the Rio?

Just because the Rio has been sold doesn’t mean the WSOP will necessarily hit the road even after 2021. There is still some wiggle room for Caesars to manage the property beyond that date.

The news release announcing the sale notes:

“The buyer has the option to pay Caesars $7 million to extend the lease under similar terms for a third year. At the end of the lease term and at the request of the buyer, Caesars may continue to manage Rio or may provide transition services to the buyer.”

That offers some room for the WSOP to stay put as well. It would make sense for the if Imperial plans to keep the property as a casino.

Imperial, a real estate company based in New York, gets a major event that attracts thousands of players each summer. It’s a good bet many of those would find other places to gamble if they weren’t already playing at this off-Strip property.

The WSOP offers Imperial a chance to keep customers coming through the doors.

Could the WSOP still be sold?

With the announcement of the Rio’s sale, Caesars confirmed its commitment to the WSOP.  The company has indicated keeping the event was a big part of the sale.

Caesars CEO Tony Rodio noted in the news release:

“This deal allows Caesars Entertainment to focus our resources on strengthening our attractive portfolio of recently renovated Strip properties and is expected to result in incremental EBITDA at those properties. The retention of the World Series of Poker and retention of Caesars Rewards customers are all factors that make this a valuable transaction for Caesars.”

That may be the case, but could that line of thinking change? The company is currently undergoing a merger with Eldorado Resorts, a deal valued at $17 billion.

Where do the new masters stand on poker? A smaller company with big aspirations, Eldorado’s interest in the WSOP isn’t yet known.

Plans change in these types of deals. Eldorado will surely unload some Caesars properties. Could that also include the WSOP?

Certainly, the WSOP might be of interest to other suitors if the company decides to rid itself of the entity. The next two years will certainly be interesting as the WSOP moves into its second 50 years.

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